Oh definitely.
I wish they would hire me as a consultant. I work cheap.... as in free. Of course the advice might be worth exactly what they pay for it.
But here is what i would do if i were Clayton. The street has voted rather loudly on what we think of this deal and any deal with Bland. The stock badly cratered on a buyout offer. That is really hard to do. Most sub penny's rocket north on any offer.
So Clayton should immediately move to rescind and let's slow down and formulate a different plan moving forward.
First of all let's be happy that we have a profitable, growing little company with a healthy amount of inventory that is decades old with men in charge who have been in this industry for at least that long.
Refurbing rigs are the goal. 665 has refurbed 37 rigs in the past so the expertise is there. Financing the sourced rigs is the sticking point. We all would love to have 11 rigs refurbed in the next 6-12 months, but we don't all get what we want, if we did Salma Hayek would be wearing my ring. I've learned to live with the disappointment.
So why not source one rig for our best customer, rebuild it to their specifications, and finance it internally like we presumably did with the 37 previous rigs. We could maybe do one rig a quarter. Imagine what adding $7.5 million in revenue and $2.5 million in profits would do to the stock price? 15 cents, 20... 25?
What would 25 cents value Clayton's 2.4 million A-1's at? Well they convert at 80% of the total outstanding at the time of conversion so you need to multiply 644 million times 5. That is 3.22 billion shares. Then subtract the 644 million that the common shareholders own and you get 2.576 billion shares owned by the 3 insiders.
Clayton's 2.4225 million A-1's represent 80.75% of the total so Clayton's total would be 2.08012 billion shares, and at 25 cents each they would be worth $520 million before the 5 to 1 dilution. Now converting would be stupid because it would badly dilute the base but if you got your market cap up to say $32.5 million dollars, a buyout offer of 8 million would not be out of the question. And that is after just one booked rig!!!
Jason, are you seeing why Bland is like a horny Beagle humping your leg to get those A-1's? You are set up perfectly to change your financial family tree forever. Your great, great, great, great grandchildren will be benefiting 8 decades after you kick the bucket. Don't give Bland's relatives that money.
Let's slow down and build the business.
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